Gaynor on the ports
January 14th, 2012 at 1:00 pm by David FarrarBrian Gaynor provides some excellent analysis:
One of POA’s biggest issues is its wage bill of $54.9 million compared with POT’s total employee expenses of $25.3 million, even though the latter is now the larger port.
Port of Tauranga was miniscule when it listed 20 years ago, but today has higher revenue, earnings and dividends than POA.
POT is an excellent model for the proposed partial sale of the Crown-owned electricity generators and Solid Energy.
The port company had a 10 per cent ownership restriction, a strong board and management and has performed exceptionally well as a listed company under the public/private ownership model.
In 2002, the company had a capital return of $7 per cancelled share on the basis of one share for every eight shares held, and the following year it had a two-for-one share split. Thus an investor who bought 1000 shares for $1050 in the IPO has had $875 of capital returned, and the remaining 1750 shares are now worth $17,850 at $10.20 a share. These figures do not take into account total dividends of more than $370 million over the two decades.
In other words, POT’s sharemarket value has surged from $80 million to $1368 million over this 20-year period and the Bay of Plenty Regional Council, which still owns 55 per cent, has been a major beneficiary of this.
Stunning results. And the key thing to note is a mixed ownership model can result in the public’s stake being worth more at (say) 55% than if they had retained 100% ownership.
As the accompanying figures show, POA has been hammered by POT in recent years: POA’s ebitda has fallen from $92.6 million in 2003 to $74.4 million, whereas POT’s has increased from $69.5 million to $95.0 million; POA’s ebitda margin has fallen from 55.3 per cent to 40.5 per cent while POT’s has increased from 47.6 per cent to 51.2 per cent; most importantly, POA’s dividend has declined from $34.5 million to $17.6 million while POT’s has increased from $22.8 million to $40.2 million.
This is a huge concern to Auckland ratepayers as the $17.8 million POA dividend represents a return of only 2.1 per cent on POA’s $848 million 2005 takeover value.
Mike Lee should be held accountable for this.
In 2010, POA had total employee expenses of $51.9 million compared with only $18.5 million at POT and last year employee benefits plus pension costs were $54.9 million at POA compared with POT’s $25.3 million.
This is what happens when people get paid for 43 hours, despite only working 28 hours. I am presuming the POT costs included contracted labour.
Lee made the ridiculous statement that POA and POT should act in an anti-competitive way by working together to get better rates from shipping companies. He went on to say that the shipping cartel Maersk and Fonterra “have kept prices right down by playing Tauranga off with Auckland” – yet Lee was primarily responsible for stopping merger talks between POA and POT.
We want competition between ports. That drives efficiency and productivity gains.
Related posts:
- Union wants all ports nationalised
- Gaynor on GPG
- The national interest in making the ports more efficient
- Ports of Auckland loses Fonterra
January 14th, 2012 at 1:10 pm
“Mike Lee should be held accountable for this”.
This is NZ – the person who screws the tax or ratepayer is a hero; the person who has to sort out the resulting financial mess is someone to be hated for eternity.
Vote:January 14th, 2012 at 1:29 pm
POA, PPTA, NZEI!!
Has a bit of a ring to it really!
Vote:January 14th, 2012 at 1:29 pm
It’s a shame Gaynor doesn’t mention in 2006 when the CEOs of both POA and POT were in favour of merging, the politicians of the day turned them down because they didn’t think it would be a popular move.
But as usual, when it turns out down the track they were wrong, no-one says anything about it. Too bad they can’t take responsibility for their mistakes and well as they claim responsibility for perceived success.
I would have thought the duty minister could have seen his way to issuing a press release pointing this fact out to all the journos who don’t seem to have any memory. It’s about time Labour were put in the spotlight over that decision.
Vote:January 14th, 2012 at 1:32 pm
“Gaynor doesn’t mention in 2006 when the CEOs of both POA and POT were in favour of merging”
As Adam Smith famously said, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Vote:January 14th, 2012 at 1:35 pm
i see from Wikipedia that Mike Lee first dipped his nose into the trough 19 years ago.
Many of his fuckups are well known. Public Transport in Auckland for the RWC was a classic.
(of course that debacle was actually a systemic error and the fault of our mate, Nobody)
Can anyone point to any of his achievements, and, just out of morbid interest,
does anyone know what was his career before he enterred, “Public Service” ?
A further unanswerable question. Why do people keep voting him in ?
Vote:January 14th, 2012 at 1:42 pm
The only answer to your query Beryl is that they must be Jafas that vote for Mike!
Vote:January 14th, 2012 at 1:44 pm
“Lee made the ridiculous statement that POA and POT should act in an anti-competitive way by working together to get better rates from shipping companies.”
Whaaaat? Lee advocates the abuse of monopoly power and advocates cartel pricing between two separate companies???? One company listed on the NZX and the second owned by the Auckland Council?
Mike Lee should know that this is illegal. It would be the equivalent of all NZ airports (of which one is partially owned by Auckland Council) forming a bloc and telling all airlines that landing charges will be a fixed amount per movement / per airport / per aircraft / take it or leave it. All hell would break loose – with good reason. Lawyers specialising in anti competitive behaviour, would have a field day.
Mike Lee cannot be this daft? Surely????
Vote:January 14th, 2012 at 1:46 pm
“POA, PPTA, NZEI!! Has a bit of a ring to it really! ”
Sure does, Johnboy. And throw in the PSA for good measure. Can you imagine the mood change within the politburo if it came to pass?
Bwahahaaaaaaaaaaaaa
Vote:January 14th, 2012 at 2:02 pm
“Mike Lee cannot be this daft? Surely????”
He obviously has much more in the upper storey than all you Jafas that have been voting him back in since time immemorial Elaycee!
Vote:January 14th, 2012 at 2:04 pm
Course you voted for lyin Len too eh?
Vote:January 14th, 2012 at 2:05 pm
Us Huttites voted for a real Mayor. Go RAY WALLACE !
Vote:January 14th, 2012 at 2:07 pm
JB
And your local MP is ?…………………………………….a convicted criminal I does believe
Vote:January 14th, 2012 at 2:11 pm
( Gnashing of teeth ). You win some you loose some PEB!
Vote:January 14th, 2012 at 2:18 pm
Next time I see Ray I might suggest he stands for Hutt South.
Now that could wipe the pond slime off the Ducks beak as most of his support comes from Wainui!
Vote:January 14th, 2012 at 2:21 pm
“He obviously has much more in the upper storey than all you Jafas that have been voting him back in since time immemorial Elaycee! ”
Wash your mouth out, Johnboy.
Firstly, once a Hutt Valley boy – always one. I’m currently on secondment to the north.
And did I vote for Loony Len? Nah. Penny? Hell, no. Mike Lee? Pffft.
As much chance me voting for these morons as the blog idiot being invited to join MENSA. Nil. Nada, Zip. No Way. Never.
Vote:January 14th, 2012 at 2:33 pm
What you haven’t been invited Elaycee? shame.:o
Still being a Hutt Valley boy who like JB hasn’t yet seen the light probably explains it. 3 days visit for rellies sake and its was still a bloody cold shithole. Especially after 3 days in the Wairarappa with 3 days at about 28 degrees. Going to 14 in Welly wood confirmed that people who live there are masochists which of course is why the vote in the Mallards and other dipshits like that.
Move on and go up in the world. Space down Eastern Bay for ya. The weather is better and so’s the fishing.
Vote:January 14th, 2012 at 2:42 pm
Gaynor says:- “In other words, POT’s sharemarket value has surged from $80 million to $1368 million over this 20-year period”
In other words, the BOPRC has been growing POT.
Figures.
Vote:January 14th, 2012 at 2:51 pm
And a dose of Listerine for you too, V2. Comparing me to the blog stalk / narc / nonce / pimp / boy racer / know all / moron and owner of the world’s best, self compensating hand jigger, is really nasty and hurtful…
When I came to AKL, I was told in advance all about the fantastic weather. And the first year I was here it was great – really! But it’s been downhill ever since. Anyone who says it doesn’t blow like a bastard in Auckland, tells lies. And it fair pisses with rain. But the business opportunities here are just too good to ignore / neglect.
But with every rain cloud comes a silver lining: the best thing about the crap weather up here lately, has been the knowledge that the clowns who were squatting at Body Odour Central were fair copping it – their air conditioning at Aotea Square was only activated when they opened the tent flap!
Vote:January 14th, 2012 at 2:57 pm
Mike Lee is an extreme left wing politician. Extreme left wing politicans don’t give a shit about the law, or commerce.
Vote:January 14th, 2012 at 3:03 pm
Maori Party sides with port workers
Saturday, 14, Jan, 2012 6:36AM
The Maori Party has come out on the side of workers in the Ports of Auckland dispute.
Co-leader Pita Sharples is concerned about the impact the row will have on the livelihoods of thousands of workers, particularly young Maori.
He’s written to the tertiary education and labour ministers asking for an assurance employment opportunities for those affected are on their radar.
He’s also concerned about the decisions of Maersk Line and Fonterra to re-route trade to Tauranga and Napier, and what impact there may be on jobs.
Labour isn’t commenting on the dispute.
Industrial relations spokeswoman Darien Fenton says she doesn’t think it’d be helpful to do so while negotiations are still ongoing.
ARE we Surprised?
Vote:But where was Sharples when he lined up with 103 other ethically challanged MP’s to remove the rights of the 24% of our young people who are unemployed by setting their wage rate above market prices.
Doesn’t anyone teach these morons about cause and effect and how it hurts other people when they are just thinking about themselves.
January 14th, 2012 at 3:53 pm
POA is a port that imports goods. Imports are down so there is less work and less profit. Otherwise POA would be as profitable as POT
So what does POA suggest, a more casual work force like they do at POT (which is an exports port).
What the MUNZ is asking for is secure income for their members in as safe working environment as they can get. That is what most employees need.
The management POA want to marginalise their workforce. Who wins there a few shareholders and senior managers (who get large bonuses?)
Certain ideologists want the ports sold by local authorities that own them. So in the long term they can increase profits for new owners. Also give councils less income in the long term. A win for who?
Vote:January 14th, 2012 at 3:57 pm
Mike Less is a clever leftie politician which makes him a damn nuisance. He has no got one damn clue how a company makes money, he sees then as a vessel for his precious workers and damn the shareholders who are taking all the financial risk.
Vote:January 14th, 2012 at 4:03 pm
“Mike Less is a clever leftie politician”
Fuck. They should offer him David Shearers job!
Vote:January 14th, 2012 at 4:07 pm
Inky_the_Red: In a word, yes. I absolutely want the ports sold, since the councils have generally been poor owners. And yes, I want them to increase profits, as I would like all businesses to increase profits.
But, I don’t see how that gives councils less income in the long term (although I’d like to do that too if it were possible). Auckland Council is making 2% on POA. If they sold it and put the money in the bank, they’d do better – they’d have more money. Sure, the new owners would probably fix POA, and therefore make a profit, but it’s completely false to suggest that Auckland Council could have ever had that profit – it doesn’t make a profit in Auckland Council ownership.
So, realistically, what you are really saying is that you’d like the POA employees to keep their above market salaries, and you’d like all Auckland ratepayers to subsidise that through accepting below market returns. And you’re deeply against Auckland Council selling the port because the new owners wouldn’t be able to just tax the rest of NZ to pay for it, so they’d probably cut those above market salaries. Is that a fair summary?
Vote:January 14th, 2012 at 4:33 pm
Now now chaps, one has to remember Auckland is just chocka with jafas, white, brown, yellow but they are still just fucking jafas.
Vote:And with the POA they have a port they deserve.
January 14th, 2012 at 4:39 pm
Sorry about typos. It is Mike Lee, who plots and schemes the whole time. He is a person to be treated with the utmost caution. You can be sure he has plotted and schemed every move he makes. What makes him dangerous are his leftist views. He will be in there plotting with the Union their next move. But I don’t care about the Port. I want that dreadful eyesore OUT of central Auckland so the people of Auckland can get their harbour back.
Vote:January 14th, 2012 at 4:41 pm
What them fucken jafas really need Grumpy is the cold steel right up them!
Vote:January 14th, 2012 at 7:06 pm
i wouldn’t doubt that a specimen like Mike Lee plots and schemes the whole time.
What else has he got ?
For a total loser to remain on the public tit for so long he must be as cunning as a shit house rat.
Fuck. He’s even more cunning than Richard Northey.
This could be a bit harsh, but i note that Sandra Lee eventually woke up to this runt and dumped him.
What did he do before he latched onto the public tit ?
Vote:January 14th, 2012 at 7:31 pm
“I am presuming the POT costs included contracted labour.”
The article did state that “These contractors are not included in the employee expenses quoted above.”. Its a shame that it wasn’t included as I would say that even with the contractors expenses, POT is far better of that Auckland.
One other thing Gaynor missed was that the government donated $6 millionto the POA for a metro-port, whereas POT paid for, and built their own.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10577926
Perhaps Auckland Council should do a cost benefit analysis to see if Ports of Auckland is worth keeping in existance – I’d imagine that the real-estate could be used for far better and more productive purposes considering its location. It is located at a poor place for a port – in the busiest place in the biggest part of the country – with no rail adjoining the port.
Vote:January 14th, 2012 at 7:36 pm
bereal
A ships officer. Holds a BSc in biological science. Refer his propaganda page: http://www.mikelee.co.nz/about/
Vote:January 14th, 2012 at 7:37 pm
There’s a few issues here.
Gaynor raises issues regarding the competence of management at POA. Conveniently, but not suprisingly, DPF ignores this issue.
Second, I understand there’s been 3 deaths on the POT in recent times. How many deaths (if any) have there been on POA? Does POT have lower safety standards than POA? If so, why?
Third, the wage bill of $30 million for wharfies is only a third of total costs. Gaynor hasn’t looked at the other costs. Why not?
Vote:January 14th, 2012 at 7:42 pm
Inky_the_Red – “What the MUNZ is asking for is secure income for their members in as safe working environment as they can get. That is what most employees need.”
So the Port is a welfare organisation now? It is abundantly clear that some members are going to have to lose some hours or their job. The ports labour utilization is at 65 percent compared to Taurangas 80%. This means that an Auckland wharfee gets paid 35% of their income for doing nothing when at Tauranga they get paid 20% of their income for doing nothing. It is clearly unsustainable. It seems like the union would rather the port closes down rather than see the ports management get their way.
However – coming from Tauranga I am rooting for the wharfees – the more they get their way, the better our port, and our economy fairs. Incidentally – POT is a glaring example of how a publicly owned asset can improve with private management.
Vote:January 14th, 2012 at 7:43 pm
Manufacturing a crisis
by Whaleoil on January 14, 2012
via the tipline
It seems some MUNZ workers are now talking out of school.
MUNZ are dominated on the floor in Auckland by a bunch (probably around 20) of gnarly old wharfies who have been with the Port for a long time. Years.
They are probably getting near retirement, and will be due pensions in the not too distant future. One pension I’m told exceeds $800,000.
Is it possible that this whole dispute thing is really about them getting redundancy as well as pension through this process.
They would get a large redundancy payment, given the time they have been with the Port, and lose none of their pension.
They are much better off than the newer employees who haven’t amassed a large pension, or many service years.
Is it possible that they have jacked this up to suit themselves?
We already know that they are greedy rich pricks when it comes to working hours and remuneration, is the top echelon of the union really so greedy and callous as to throw their workmates under the straddle carriers so they can cream off the cash?
I think they might be.
Without doubt.
Vote:Question who gets the proceeds if the union gets closed up? Would it be the same little group of 20?
Always thought that this was the background. If Labour collapses who gets the proceeeds of its spolils and assets that have accumlated for 80 years?
Think about it.
January 14th, 2012 at 7:50 pm
Workers in this country get low wages. Just as importantly, productivity gains have far outstripped pay increases.
http://www.stuff.co.nz/dominion-post/comment/5824465/New-Zealanders-get-low-wages?
Vote:January 14th, 2012 at 7:59 pm
ross – Second, I understand there’s been 3 deaths on the POT in recent times. How many deaths (if any) have there been on POA? Does POT have lower safety standards than POA? If so, why? – Probably because the Auckland workers spend far less time working – considering the Auckland port workers propensity to laziness and the auckland ports poor performance. And 3 deaths over a short period when you consider the life span of the ports is statistically irrelevant. Give me the total work place deaths over many years per port and we can then take more from the pathetic point you tried to make.
Vote:January 14th, 2012 at 8:00 pm
Here’s a bit of serious reading for all you fellows who are interested in the wharfies lot.
http://www.john-roberts-alcove.com/wharfie.html
Vote:January 14th, 2012 at 8:16 pm
Thanks for his background nasska.
As produced by himself.
This is a true hero of New Zealand.
a selfless leech who even managed to marry Sandra Lee in an effort to advance himself
After reading that i now know that this suckarse should be elevated .
He must rank alongside other greats of similar skills.
Such as Johnothan Hunt.(sic)
Vote:January 14th, 2012 at 8:18 pm
Johnboy
A good read. Pretty much describes hard line unionists in 1960/70′s Godzone. Meatworkers, drivers, seamen, cooks & stewards et al now absorbed into the real world but still the dinosaurs on the waterfront cling to the featherbedding past.
Vote:January 14th, 2012 at 10:20 pm
Where is Silent Shearer? John Key and the Government are keeping out. There is a perfect vacuum for him to fill, grab some headlines and airspace and make a it of a mark to start the year. Instead, not a peep! He could widen and lead the debate.
Doesn’t he know what to say? Has he got nothing to say? Is he too scared to say anything? Are his supporters still bickering over what he should say? Has he disappeared?
It’s not where’s Wally but where’s David?
Vote:January 15th, 2012 at 12:55 am
I’d just like to say something about NZ pay, I’m curious to your answer to this question.
I run my own IT firm. I employee 3 people. I’ve been going now for 7 years. I find it really hard to get good money for my services. The industry is very competitive.
I’d love to give my employees a big paycheck, but I can’t. It’s because other businesses I look after are always trying to cut costs. It’s a vicious circle.
FYI: I deal with bigger corporates.
What can be done?
Vote:January 15th, 2012 at 1:45 am
Impossible to say without more information.
Ideally you would be the one getting out-sourced work. If they are cutting back on your service, it probably means it is a luxury rather than a necessity. Deal with smaller corporates, they are less likely able to replicate your work internally. Also, equity incentives could work for your staff.
Vote:January 15th, 2012 at 8:36 am
What do MPs get paid and how many days do they appear in the House?
Well, a backbench MP gets paid almost $142,000. Parliament sits for 93 days (or about 1.8 days per week). Of course MPs do some electorate work. But by international standards, it is apparent that MPs do not spend as much time in the House as they could on parliamentary business. It is also apparent that in comparison with wharfies, MPs have got by far the better deal. MPs’ sick leave provision, for example, is far more generous than that of wharfies. MPs have virtually unlimited sick leave – Chris Carter was able to take two months sick leave (though apparently he had to pay the huge sum of $10 per day). MPs can also miss up to 14 sitting days. I’m surprised Mr Farras hasn’t railed against the luxury working conditions of our MPs. On the other hand, they’re not unionised. That might have something to do with it.
http://www.stuff.co.nz/waikato-times/news/4970907/What-me-work-Fridays
Vote:January 15th, 2012 at 8:43 am
“And 3 deaths over a short period when you consider the life span of the ports is statistically irrelevant.”
Yeah I always thought the Right didn’t care about workers. Thanks for the confirmation. I guess 29 dead at Pike River is just an aberration and we shouldnt be concerned by that. Plenty more workers where they came from, eh Charlie?
Vote:January 15th, 2012 at 10:41 am
A practical question, please. If someone is moving back from Australia to NZ, to Northland, ordinarily their stuff would be shipped to Auckland. If that were to happen now and perhaps at any time during the next three weeks say, would it be held up in a logjam? Would it be better to specify to the shippers that they must use Tauranga – if that were possible?
Vote:January 15th, 2012 at 12:15 pm
‘One of POA’s biggest issues is its wage bill of $54.9 million compared with POT’s total employee expenses of $25.3 million, even though the latter is now the larger port.’
Why does Gaynor ignore POT’s ‘contractor services’ expense of $33M (annual report for 2011)? If POT contract out more labour than POA then a straight comparison of the wage bill is meaningless.
Vote:January 15th, 2012 at 12:21 pm
Ross
I’ve finally gathered that you support the Wharfies, sad as you are that’s your right, but now might be time to left this public support drop.
In fact when you somehow manage to bring 29 mining deaths into it definitely time.
Vote:January 15th, 2012 at 12:32 pm
Paul,
Go back and read the messages. It was Charlie who said that deaths on the Ports of Tauranga were “irrelevant”. It’s an indictment on the thinking of some of those on the Right. Workers mean absolutely nothing to them.
Vote:January 15th, 2012 at 12:36 pm
“If POT contract out more labour than POA then a straight comparison of the wage bill is meaningless.”
Well, exactly. It seems that Gaynor had a predetermined conclusion and needed to find evidence to support it. The fact he doesn’t know what the wage bill is at POT undermines his argument. Of course, why the wage bill should be the same at both ports is a question he doesn’t address. It’s a bit like saying that the price of a house should be the same in Tauranga and Auckland, or the price of electricity should be the same. Gaynor really hasn’t thought through the issues very clearly.
Vote:January 15th, 2012 at 12:40 pm
Ross
He said statisically irrelevant and he’s correct, you brought Pike River up, which has nothing whatssoever to do with this.
You are correct that its a crime about MP’s and their work load ,which unless you are a cabinet minister is practically none existent, most spend three years electioneering ,but again this has nothing to do with the Auckland Wharfves.
Vote:January 15th, 2012 at 12:47 pm
Paul,
I’m sure you’ll agree he might have been better off to say that three deaths were highly relevant. Workers shouldn’t be killed at work. Pike River is another example of shoddy safety at work. If the workforce at POA is casualised – as the company wants – what will that for safety, or doesn’t it matter?
Vote:January 15th, 2012 at 12:55 pm
Ross
Deaths happen eveywhere, I’ve personally attended three deaths at the POA in the early 80s when everyone was unionised so as a point its not moot, unfortunately shit happens and deaths should not be politicized
Vote:January 15th, 2012 at 6:01 pm
Then there’s Garry Parsloe, the union boss. A single man, he left Dunedin to become a seafarer at 15. He watches rugby. He shuns a business suit for a polo shirt with the union logo on the front. He wears a gold chain round his neck. He owns a flat on Fort St, around the corner from his office, so he can hop into work “seven days a week, if I like”.
Vote:January 15th, 2012 at 6:25 pm
ross- see pauleastbay’s comment. And you moron – i never said that the deaths were irrelevant – I said that they were statistically irrelevant considering the short period when you consider the life span of the ports, and it was in the context of comparing sub-contracting vs the current unionised model used at POA. Work-place deaths happen in completely unionised places as well.
Vote:January 16th, 2012 at 11:22 pm
Ross.
+1
As for Gaynor – he stuffed up his labour costing for PoA vs PoT, by not including contractors in the latter. That made PoT look more efficient than PoA – which is bollocks.
Fact is, PoA is doing quite nicely, thankyou very muchly guv, and is a profitable enterprise.
I don’t think any of you lot would appreciate having your jobs casualised – so why do you think it’s ok to stick it to the wharfies? Envy politics? I suspect so.
Vote:January 16th, 2012 at 11:25 pm
YesWeDid (582) Says:
January 15th, 2012 at 12:15 pm
+1
I missed your post. We said the same thing. Sweet.
Vote: